Pomeroy IT Solutions
(NDAQ:PMRY) is quickly turning into an interesting restructuring play
for opportunistic investors. The national IT solutions provider has
faced several issues over the last few years stemming from poor
governance practices by key executives and management personnel. Many
investors are hoping that several recent changes to the company's
governance will help unlock value for shareholders and jump the
company's share price.
Flagg Street Capital, who owns
approximately 9.8 percent of the company's
outstanding shares, took notice of these inefficiencies and has been
pressuring the company towards several
governance reforms. The activist hedge fund believes that such reforms
could help the company increase its focus and cut down on its expenses.
Earlier this year, Flagg Street Capital announced a proxy contest aimed
at installing its own nominees to the company's board and enforcing
change.
This
move quickly caught the Pomeroy's attention. Earlier this month, the
company fired its President and CEO Stephen Pomeroy after an
independent committee found that certain, non-illegal conduct and
actions were adversely affecting shareholder value. Even better, the
company agreed on July 12th to give two Flagg Street Capital
representatives seats on the company's board of directors. Combined,
these events are great news for shareholders as they could lead to a
much more efficient company. This makes PMRY a
stock to watch!
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